Australia’s construction industry has recorded its 24th consecutive month of contraction according to the latest figures released by the Australian Industry Group (AI Group).

 

The Australian Industry Group Performance of Construction Index indicates that the sector contracted by 0.2 points, where anything below 50 indicates a contraction in activity.

 

By sector, commercial construction recorded the sharpest fall in more than three years. House and apartment building also contracted substantially, while engineering construction contracted the slowest of all sectors reflecting the strength of resource related projects.

 

“The index continues to reflect the cyclical downturn in residential housing activity as well as the downturn in non-residential building and construction, outside the mining sector,” AI Group’s Chief Economist Julie Toth said.

 

The key findings for May include:

  • The national construction industry continued to contract sharply in May amid declining new orders and subdued workloads.
  • The latest Australian Industry Group Australian Industry Group Australian Performance of Construction Index (Australian PCI®) in conjunction with the Housing Industry Association, registered 34.7 in May pointing to a broadly unchanged rate of contraction from April.
  • The Australian PCI® has now been in negative territory for two years.
  • Weak demand, difficulties in obtaining finance, project delays and intense competition to secure new work were the main factors cited by respondents as undermining activity in the industry.
  • Reflecting the continued lack of new business, the new orders sub-index contracted for the 24th straight month in May - recording 33.7, only a slight improvement on the previous month.
  • Falling activity and attempts to reduce costs saw employment again contract at a sharp rate (38.4).

 

The full report can be found here